Ulrich Beck - Organizations in World Risk Society

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T oday’s critical debate over—and, sometimes, severe doubts about—risk-management practices ironically follow in the wake of massive

endeavors to control and rein in the risks associated with industrializa-tion. Accidents and unforeseen side effects time and again belied thepromises of risk management and damage control. The hidden risks of

risk models lie under the surface of controllability. Because modern risk management is often designed to maximize predictability, it frequently underestimates the occurrence of unexpected and unlikely—yet nonethe-less possible—events, in terms of both the frequency and the severity of hazards. This unfortunate combination is due to the “uncertainty trap” inwhich many industries are caught: Industries have to be reasonably opti-mistic so as to base their decisions on rational, probabilistic criteria. Thusthey have to look at the most—sometimes maybe the worst— probable risk, but not at the worst possiblerisk. The latter perspective, however,characterizes much of the late modern public attitude toward businessand science. It is based on a “culture of uncertainty.” In order to under-stand the consequences of this emerging global culture of uncertainty, it isnecessary to develop a broader understanding of risk and risk manage-ment within the context of social and political theory.

In this chapter, we discuss the emergence of a culture of uncertainty and its consequences for organizations against the backdrop of the theory of risk society. We shall proceed as follows: (1) We will discuss the trans-formation of late modern society into a risk society—that is, a society increasingly confronted with the undesired side effects of successfulmodernization. (2) In the process of this transformation, the modernconcept of “calculable risk” comes under pressure by the reemergence of

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1Organizations inWorld Risk Society

Ulrich Beck and Boris Holzer

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uncontrollable uncertainties that are often due to scientific and technolog-ical innovations. (3) That has profound implications for organizations

which have hitherto played a significant role both as sources of acceptableentrepreneurial risks and as “trustees” in charge of managing collectiverisks. (4) In contrast to the past, public scrutiny of organizational deci-sions is not confined to the national domain anymore. Over recent years,the debate about the uncontrollable risks of industrialization has galva-nized a global public that casts a critical eye on technological develop-ments and the benefits of innovation and scientific progress. (5) As aconsequence, organizations as actors in the transnational realm face anincreasing “legitimacy gap.” They make decisions whose consequencestranscend any particular time or place—and thereby the regulatory appa-ratus of the state. (6) It is unlikely that the legitimacy gap can be closedby the development of more sophisticated risk management practices.Rather, organizations have to broaden their own understanding of risk soas to include fundamental uncertainties as part of both their decision-making and their relationships with the public.

Modern Society as a Risk Society

Modern society has become a risk society in the sense that it is increasingly occupied with debating, preventing, and managing risks that it has itself produced.1 The risks of risk society are neither the results of external,natural forces nor of deviant behavior, but of the societal, usually technol-ogy-based pursuit of legitimate and valued objectives. Other hazards anddramas of human life—such as plagues, famines, and natural disasters—may sometimes have consequences just as disastrous as modern mega-technologies. Yet they differ essentially from the “risks”of risk society sincethey are not based on decisions, or, more specifically, decisions that focuson techno-economic advantages and opportunities and accept hazardsas the dark side of progress. Risks therefore presume industrial—that is,techno-economic—decisions and considerations of utility. They differfrom other hazards and dangers by their “normal,” “peaceful,” and oftensystematic origin in the centers of rationality and prosperity. They differfrom preindustrial natural disasters by their origin in decision-making,which is of course primarily conducted by organizations and corporateactors and only rarely by individuals.

The association of risk with decision-making has important conse-quences: Preindustrial hazards, no matter how large and devastating, were“strokes of fate” raining down on humankind from “outside” and attribut-able to the external world. Blame and accusations were of course formu-lated, but they were directed against agencies that could hardly be heldresponsible. They were thus in the broadest sense “religiously motivated”

and not—like industrial risks—politically charged. For with the origin of

4 NEW RISKS, NEW CRISES, NEW DANGERS




industrial risks in decision-making the problem of social accountability and responsibility irrevocably arises, even in those areas where the prevail-

ing rules of science and law permit accountability only in exceptionalcases. People, firms, state agencies, and politicians are responsible forindustrial risks. The recognized social roots of risks make it nigh impossi-ble to externalize the problem of accountability.

Therefore, it is not the number of dead and wounded and not the finan-cial damage either, but rather a social feature that makes the hazardsof mega-technology a political issue: their ultimate origin in decision-making. The question remains, however: Have we not witnessed a periodof continual growth in calculability and precaution in dealing with indus-trially produced insecurities and destruction in the past two hundred years? To be sure, the institutional history of industrial society also is thehistory of the various regimes for dealing with industrially produced risksand insecurities (Beck, 1996a; Bernstein, 1996; Bonß, 1995; Ericson et al.,2003; Evers & Nowotny, 1987; Ewald, 1986; Lau, 1989). The idea of react-ing to the uncertainties of new markets or new technologies with collec-tive agreements—insurance contracts, for instance, which allow theindividual person or organization to trade in a small regular premiumagainst the potential losses in cases of dramatic damage—is not particu-larly new. Its origins go back to the beginnings of trade and intercontinen-tal navigation. But with the growth of industrial capitalism, insurance wascontinually perfected and expanded into nearly all problem areas of socialaction. Consequences that at first affected only the individual have become“risks”—systematically caused, statistically describable and thus predictabletypes of events—which can therefore also be subjected to collective rulesof recognition, compensation, and avoidance.

In order to grasp the dialectics of endangerment and insurance, we mustnot forget that the termriskhas two radically different meanings. It appliesin the first place to a world governed entirely by the laws of probability, inwhich everything is measurable and calculable. But the word is also com-monly used to refer to nonquantitative uncertainties, to “risks that cannot beknown.”2 When we speak about “risk society,” it is in this latter sense of man-ufactured uncertainties. These uncertainties, enforced by rapid technologi-cal innovations and accelerated societal responses, are creating a fundamentally new global risk landscape. It is characterized by a “culture of uncertainty”that picks up and amplifies the shortcomings of the industrial paradigmof calculable risk.3 For society as a whole, and for industrial enterprises inparticular, that leads to a precarious erosion of the securities hithertoafforded by the legitimate use of expert knowledge to define risks and theiracceptability. For a long time, the calculus of risk has provided a soundand socially appreciated connection between the physical, engineering, andsocial sciences. It can be applied not only to completely disparate phenom-ena in health management—from the risks of smoking to those of nuclearpower—but also to economic risks as well as risks of old age, unemploy-

ment and underemployment, traffic accidents, certain phases of life, and so

Organizations in World Risk Society 5




forth. In addition, it permits a type of “technological moralization” that nolonger needs to employ moral and ethical imperatives directly.

The triumph of the calculus of risks would probably not have beenpossible if fundamental advantages were not tied to it (see Beck, 1999c,p. 51f.). The first of these lies in the fact that calculable risks open theopportunity to “deindividualize”the danger of potential damages. Risks arethen revealed as systematic events, which are accordingly in need of indi-vidual insurance and general political regulation. In both cases the indi-vidual exposition to dangers is mollified by collective provisions. Throughthe statistical description of risks (e.g., in the form of accident probabili-ties) the blinkers of individualization drop off. A field for correspondingpolitical action is opened up: Accidents on the job, for instance, are notblamed on those whose health they have already ruined anyway, but arestripped of their individual origin and related instead to the plant organi-zation, the lack of precautions, and so on. A second advantage is thatinsurance payments paid on a no-fault basis (setting aside the extremecases of gross negligence or intentional damage) make it unnecessary toidentify cause and perpetrator in too much detail. In that way, legal battlesover causation become unnecessary and moral outrage is moderated.Instead, an incentive for prevention is created for businesses, in propor-tion to the magnitude of the insurance costs—or perhaps not.

The important social function of the calculus of risk, then, is to makethe industrial system capable of dealing with its own unforeseeable future.The calculus of risk, protection by insurance liability laws, and otherdevices promise what is basically impossible: Future events become theobject of current action—of prevention, compensation, or precautionary after-care. As François Ewald (1986) has shown, the major innovation of the calculus of risk lies in making the incalculable calculable, with the helpof accident statistics, through generalized settlement formulae as wellas through the generalized exchange principle of “money for damages.” Inthis way, a system of norms for social accountability, compensation, andprecautions—though controversial in its details—creates present security in the face of an open uncertain future. Modernity, which brings uncer-tainty to every niche of existence, finds its counterprinciple in asocial com- pact against industrially produced hazards and damages,stitched togetherout of public and private insurance agreements and thus activating andrenewingtrust in corporations and government.

From Calculable Risk to Uncertainty

The transition from industrial to risk society is deeply intertwined withthe waxing and waning of trust in calculable risk. There are two differentstages of risk society. In the first stage we see a “residual risk culture”: the





belief that risk-taking is necessary to realize opportunities and that thepotential hazards will be cured by further progress. In this stage, there is

faith that the consequences of industrialism can be tackled in the sameway they have been dealt with in the past: by developing more efficientmarkets, better technology, and better rules of law. In this context, peoplewho point to systemic risks are usually regarded as scaremongers who justdo not get the facts right. But during this stage, global risk factors are con-stantly piling up. The fact that environmental problems go largely unno-ticed simply helps to exacerbate them. Eastern Europe under Communismdisplays an informative case of how the denial of environmental problemscan lead to environmental disaster.

Three factors contribute to the largely unnoticed production of risk fac-tors. First are the metanorms of risk definition, particularly the legal normsof how to attribute liability—that is, causes and consequences, under con-ditions of high complexity and contingency. If it is necessary to name oneand only one actor, in the overwhelming majority of casesno actor can benamed. This is exacerbated by the fact that, second, a significant number of technologically induced hazards, such as those associated with chemicalpollution, atomic radiation, and GM organisms, are characterized by aninaccessibility to the human senses. They operate outside the capacity of (unaided) human perception. Everyday life is “blind” in relation to hazardsthat threaten life and thus depends on experts and counterexperts.Not only the potential harm but this“expropriation of the senses” by global risksmakes life insecure. Third, then, there is a significant interrelationshipbetween ignoring a risk that cannot be attributed according to themetanorms of risk definition in law and science andenforcingrisk produc-tion as a consequence of industrial action and production.

It is only in thesecond stage in the emergence of risk society that thegrowth of global risk factors enters public discourse and everyday life.At this stage, risk society becomes reflexive, and thus changes its politicaldynamics. Everyday life becomes significantly conditioned by risk recogni-tion and response, from the food we eat to the business decisions we make.Once the link between the definition of risk and the breakdown of mar-kets (and sometimes the emergence of new markets) is recognized, a sociallearning mechanism unfolds. It is an emergent structure of innovationthat affects the economy, politics, and culture. Early risk society thus hasno significant consequences for the established coalition of industry,science, and state administration that oversaw the development of modernindustrial society. In the second stage, however, industrial enterprisescannot count on state administrations in the same way. They cannot counton either the lawmakers or the judiciary to continue to base their judg-ments on the assumption of continual progress. It is not merely a matterof the democratic process splitting the old coalition into separate interestgroups, but a conflict of social paradigms: different principles of society,different principles of knowledge, and different principles of experience.





During the transition, the new risk paradigm of uncertainty is gradually entrenched and professionalized. It is embodied in new industries and

new experts. There arises a fundamental split between those who do notbelieve anything should be changed in our relation to risk, that we shouldcontinue on as we always have, and those who now perceive the situationin the context of much wider risk horizons.

In both stages there are different paradoxes involved. In the first, dom-inated by a residual risk culture, the ignorance of the globalization of risk increases the globalization of risk. In addition, scientists allow themselvesto get caught in a safety trap. When they are confronted with skepticismand what they call “irrationality,” they promise—as they did in the case of genetic engineering—that everything is “absolutely” safe, controllable, andreversible. The consequence of such absolute claims is that every new risk and new accident shakes the foundations of an inalienable right to safety that seems to have been promised. In the second stage, characterized bya culture of uncertainty, the safety trap takes a different form. Insteadof untenable promises of safety, widespread distrust prevails, and conse-quently, intense debates about and scrutiny of new technologies are theorder of the day. The acceptance of every new technology or productis increasingly determined by risk considerations. But since the wholepremise of this new attitude is that uncertainty is ineradicable, carryingout this procedure in full would completely stifle innovation. If the worldis perceived only in terms of risks, then nobody can act. Yet as Wildavsky aptly put it, “no risk is the highest risk of all” (Wildavsky, 1979). The con-cept of uncertain risk only says what shouldnot be done. It does notaddress what should or could be done.

There is no safety in calculable risk, but giving priority to uncertainty does not guarantee safety either. These impasses of both a residual-risk logic and the culture of uncertainty show that we cannot expect a straight-forward solution to the problems of risk society. Through a host of chal-lenges and uncertainties with which we are concerned today—nuclearpower, many types of chemical and biotechnological production, as well asthe continuing and threatening ecological destruction—the foundationsof the established risk logic are being subverted or suspended.

The emergence of risk society is emblematic of the process of reflexive modernization,which entails the self-confrontation of modernity with theside effects of modernization (Beck et al., 2003; Beck et al., 1994; Benton,2000). The risks of risk society are not external threats that call for new technologies and better knowledge. They are side effects of new technolo-gies and of the growth of scientific knowledge. Accordingly, the problemof modernity has moved from solving externally imposed problems tosolving self-produced problems. The fact that modernity and its very insti-tutions are at the core of many of the most pressing problems such asthe ecological crisis raises doubts as to whether theinstitutions of moder-nity are capable of solving the problemsof modernity. This marks the





break with “linear” modernization: In reflexive modernization, the very methodof problem-solving itself becomes problematic.

From Trustee to Suspect:Organizations in Risk Society

Risk refers not to “objective” probabilities but to the “subjective” expecta-tion of possible damage related to one’s decisions. Although knowing theprobabilities can serve to legitimize risk-taking as such, it cannot eliminatethe necessity of decision-making.The evaluation of a risky choice dependson the realization of uncertain outcomesin the future and is thus only pos-sible after the fact. Risk is the possibility of future damage that is attributedto a decision —that is, to causes internal to a person, an organization, orsociety. Danger, in contrast, is the possibility of future damage that isattributed to factors over which we have no control.4 Thus, an earthquakewould usually qualify as a danger, whereas a skiing accident would beregarded as a consequence of a risk that a person undertook. If we distin-guish between danger and risk, we can conclude that risk society may wellbe less “dangerous” but more “risky” than any other kind of society—precisely becausedangersare increasingly turned intorisks.

Organizations relying on technology have been important vehicles forthe expansion of risk and uncertainty in modern society. Technology inparticular plays a crucial role in transforming dangers into risks. Many events formerly regarded as beyond the scope of human influence andintervention are now routinely a matter of human control by virtue of technology. To use a very simple but convenient example (Luhmann,1986): If one leaves the house, one always runs the “danger” of gettingwet. It is a danger since rain is not, in our society, attributed to anyone’sdecision.5 Yet the availability of a specific technology—the umbrella—cantransform rain from being a danger to being a risk. That is, once one hasthe option of taking along an umbrella, the question of whether or not toget wet depends on adecision:to use the umbrella or not. In many areas,

technology has thus greatly extended the scope of human decision-making—and accordingly the possibility of risk and error.Modern organizations are also an important factor in the production

of risk through technology in a more general sense (Perrow, 1984; Short& Clarke, 1992). Much more than individuals, who are not normally required to reconstruct all of their actions as the outcome of consciousdecision-making, modern organizations are social systems of decision-making—from the decision to hire someone as an employee to thedecision to file for bankruptcy (Baecker, 1999; Luhmann, 2000). Mostimportantly, organizing involves decisions that create premises for furtherdecisions: decisions about personnel, hierarchies, and rules.Organizations





thus have a deep affinity to risk. They construct themselves (and theirenvironment) as the outcome of decisions, because whatever happens in

an organization can and must be interpreted as a decision. Modern tech-nology and organizations contribute to a process through which a worldof dangers is transformed into a world of risks. The world and its dangersare not “givens” anymore, as technological tools and organizational rou-tines make them increasingly a matter of decision-making.

Yet the emergence of risk society not only results in new risks faced by individuals, states, and organizations, but also fundamentally alters theway in which organizations relate to their social environment. In a way,the organization may be regarded as a convenient vehicle for efficiently achieving clearly defined objectives, as a “system of consciously coordi-nated activities or forces of two or more persons” (Barnard, 1938, p. 73).In this sense, they are problem-solving institutions. Seen through the lens of reflexive modernization theory, however, they are also problem-producinginstitutions. They partake in a shift characteristic of risk society: from thedistribution of “goods” to the distribution of “bads.” This is evident fororganizations of the industrial sector. While observers once focused ontheir achievements, products, and services, they are now equally interestedin the side effects of their operations:

Where once the individual large corporation was free of public pressureunless it specifically misbehaved—stifled competition, endangered itsemployees, or whatever—today it is being challenged for virtually everything it tries to do and, indeed, for not taking the initiative in thesocial sphere. Once there were only the owners’ goals to attend to, laterthe systems goals. Today the corporation is being asked to respond to aconfusing host of public goals, social as well as economic. (Mintzberg,1983, p. 464)

The anticipation of side effects also means that corporations areincreasingly faced with anticipatory resistance to their decisions: Nopower plant is built without protest from nearby residents, no oil fieldexplored without critical scrutiny by transnational non-governmentalorganizations (NGOs), no new pharmaceutical drug hailed withoutqualifications about its side effects. In other words, as highly visible andubiquitous institutions of modernity, organizations have to cope with asituation in which the basic principles of modernity are not taken forgranted anymore. Consequently, organizations cease to be primarily con-ceived as instruments of riskmanagement; instead, their decisions areoften perceived assourcesof risk.

This signals a significant paradigm shift. Early theorists of modernity regarded the bureaucratic organization not only as an efficient means of instrumental action (e.g., producing goods and services) but also as a toolof planning. The calculus of risk that we have described above could not





have become a social institution without being anchored in the modernorganization. Organizations are capable of planning their actions. In the

process, according to early organization theorists such as March andSimon (1958), they “absorb” uncertainties and replace them by seemingly calculable risks: “When organizations analyze problems, they try to trans-form uncertainties into risks, rationalizing problems previously outsidethe realm of systematic control” (Clarke, 1999, p. 10). Any socially signifi-cant imponderability or uncertainty seems to trigger organizationalresponses: From military security over health care to disaster control,organizations are involved in any serious societal effort to cope with anuncertain and possibly dangerous future. As responses to uncertainty, theaforementioned insurance principle and organizational planning go handin hand. Insurance serves to defuse individual uncertainties by turningthem into collectively faced, calculable risks. Organizational planning cre-ates the impression that anticipatory policies can be devised for any imag-inable uncertainty faced by larger groups of people.

However, with the emergence of an increasingly “self-conscious” risk society, it has become more and more obvious that organizations are notsimply efficient tools of purposeful action and risk management. Rather,the principles of organizing themselves often seem to contribute to theproliferation of risk. Organizations are not only part of the solution butalso very much part of the problem: “We have more to fear from organi-zations and experts overextending their reach, propelled by forces endemicto modern society, than from conniving conspiracies,” argues Clarke(1999, p. 2).As extraordinary, and perhaps even exaggerated, as such a state-ment may appear at first glance, it ties in with both the increasingly com-mon distrust of organizations and experts and the sociological analysisof reflexive modernization. As indicated above, the latter argues thatmodernity has becomeself -endangering. The biggest challenges faced by modern society are of its own making—manufactured uncertaintiesrather than external threats (Beck, 1996b). As an epitome of the moderntrust in control, rationality, and objective knowledge, the organizationpartakes of the process of reflexive modernization. While organizations inFirst Modernity could by and large rely on a tolerant, even supportivesocial environment, organizations in Second Modernity have to adapt to aculture of uncertainty that does not uncritically accept received standardsof knowledge and calculation.

Again, it is important to understand that the contemporary cultureof uncertainty is a consequence of the rather exaggerated claims of cer-tainty made during earlier phases of modernity. Many of them have beenshattered by the well-known and much-publicized accidents and disastersof the second half of the 20th century—in particular, by the Chernobyl andChallenger accidents that combine to the “Ch-Ch-syndrome” (Funtowicz &Ravetz, 1990, p. 1), that is, the collapse of mega-technologies. But others,such as Bhopal,Exxon Valdez,and Three Mile Island, need to be included,





too, if we are to understand the changed situation at the beginning the 21stcentury. Those accidents certainly inform the collective consciousness of

risk society. However, on top of the sheer monstrosity of the inflicted dam-ages, the mounting evidence of the systematic connection between risk andorganization has made a lasting impression. At least since Perrow’s (1984)Normal Accidents , the attribution of risks to certain organizational struc-tures has gained currency. The accident has ceased to be a mere mishap; ithas become a regular feature.Society has been used as a “laboratory” for new technologies in the past (Krohn & Weyer, 1989), but it is uncertain to whatextent it will tolerate such an enterprise in the future.

The Global Public and Its Problems:The Politicization of Risk Conflicts

In the process of reflexive modernization, the foundations of traditionalrisk management are eroding. Risk in Second Modernity is a cipher forirreducible uncertainty rather than for a calculable future. Neither improvedexpertise nor better communication can restore the old certainties. Theresistance of society toward scientific and technological innovations suchas GM foodstuffs is therefore not, in essence, a matter of understanding ormisunderstanding calculable risks. What needs to be understood—both

by practitioners and theorists—is that the basis of power and legitimacy has changed.Rather than particular technologies or the decisions made about them,

it is theunforeseeability of the consequences that has become the source of politics. The risk profile of new, controversial technologies is determinedby the uneasy dissent in terms of risk perception rather than by the agreedconsent among stakeholders concerning opportunities. The question, there-fore, is not whether a given technology is dangerous, but whether it is perceivedas being dangerous. Genetic engineering is one of the primeexamples. Some call its much-debated consequences “phantom risks” or“virtual risks.” Such theorists inadvertently highlight an important fact: Inthe case of manufactured uncertainties, most cause-and-effect relation-ships are and often remain controversial. What they miss is that this con-troversial nature is itself a risk—an economic one for corporations and apolitical one for governments.

The awareness of the unpredictability of ultimate consequences hasgiven rise to a world public that is highly “risk-sensitive.” But on the otherside of the risk-sensitive public are increasingly unpredictable consumers,among whom a chain reaction can be triggered by the merest hint of plau-sible evidence. Since uncontested scientific evidence is increasingly rare,public perception becomes the decisive element in such scenarios. And





because of its political weight, it is public perception that ultimately defines the likelihood of product bans or the success of liability claims. In

risk conflicts, the central question of power therefore is a questionof definitional authority.It is the question of who, on the basis of whichlegal and intellectual resources, gets to decide what counts as a “risk,” whatcounts as a “cause,” and what counts as a “cost.” The question of determin-ing who is responsible and who has to bear the burden of paying for dam-ages has been transmuted into a battle over the rules of evidence and thelaws of responsibility. The new global public challenges the existing systemof “organized irresponsibility” (Beck, 1988). The dynamic that fans risk failures into risk crises is the attempt to shift the burden of proof andthe burdens of cost that have thus far been borne by consumers and theenvironment back onto corporations and governments. Put another way,they are driven by the attempt to institutionalize the concern for ultimateconsequences.

Current and future risk conflicts seem to crystallize around a specific setof risks often referred to as “new” risks (see Lau, 1999). These new risks arecharacterized by new relationships between the actual decision-makingand the spatial and temporal scope of the resulting risks (for the latter seeespecially Adam, 1998). New risks can no longer be delimited in time andspace. They affect everyone but can hardly be attributed to anyone any-more. Properly considered, risk society has always been “world risk society” (Beck, 1999b; Beck & Holzer, 2004), but it is only slowly takingshape as the border-crossing implications of global risks are felt. The risk landscape thus created has the following elements:

(1) Irreversible consequences, unlimited in time and space, that occur only after a long latency period.Measuring “risk”probabilistically presupposes aconcept of “accidents” as things that happen at a particular time and in aparticular place to a particular group. But none of these tacit assumptionshold for the “accident” that occurred at Chernobyl. Even 20 years later,some of the victims have not even beenborn yet. Similarly, an accidentcaused by GM organisms would be just as unbounded as a nuclear acci-dent. Everything that is celebrated as a triumph of gene technology—e.g.,its universal applicability and its power to increase productivity—willhave the effect of spreading it much faster throughout the food chain.Theoretically, then, the ultimate risks of this technology would be evenmore unlimited and incalculable. We can get out of nuclear power, at leastin principle, and nuclear waste sites are at leastsites (i.e., discrete loca-tions). In this regard, biotechnology opens up a completely new arena forthe near-invisible production of risk.

(2) Contradictions of globalization.Citizenship is usually conceived of interms of national rights and national duties, and this is the framework thatregulates the risks that anyone living within the national territory may face.





But the globalization of risk has created huge difficulties for the nation-statein its effort to manage risks in a world of global flows and networks, especially

when nobody takes responsibility for the outcomes. Bovine spongioformencephalopathy (BSE) is an explosive reminder of the inability of nation-states to predict, manage,and control risk in a chaotically interacting world of politically hybrid forms. Politicians say they are not in charge, that they atmost regulate the framework for the market. Scientific experts say they merely create technological opportunities; they don’t decide how they are imple-mented. Businesses say they are simply responding to consumer demand.Society has become a laboratory with nobody responsible for the outcomeof the experiment (Krohn & Weyer, 1989). This is increased and enforced by the transnational diversity of regulatory standards. And this diversity cancause enormous tensions not only domestically but also in global, regional,and bilateral trading systems. Even existing supranational democratic institu-tions have difficulties reaching decisions. For instance, in the European Union(EU), which has probably made the greatest progress in establishing transna-tional decision-making bodies, member states during the BSE crisis followedtheir own national policies regarding the acceptance of the clearance certifi-cates for British beef. While the exercise of national sovereignty might appeara viable solution in this case, the ramifications of other global risks are not aseasily contained and therefore highlight the structural inability to managemanufactured uncertainties either nationally (through independent regula-tion) or globally (through collective action and supranational institutions).

(3) Known unawareness and the unreliability of knowledge.Theunknown far outweighs what is known. That is the undeniable conse-quence of the steady but invisible production of risk. Clearly scientistsnow know much more about BSE than before. But even now, more than adecade after the disease’s discovery, its origins, its host range, its meansof transmission, the nature of the infectious agent and its relation to itshuman counterpart, new variant Creutzfeldt-Jakob disease (nvCJD),remain mostly unknown. Ultimate risk may offer no narrative closure, noending by which the truth is recovered and the boundaries are stabilized.The lack of past experience means that in the context of manufactureduncertainties, the subjunctive has replaced the indicative. This is in largepart because the past has been so thoroughly rewritten. Many things thatwere once considered universally certain and safe turned out to be deadly.Applying that knowledge to the present and the future devalues thecertainties of today. This is the soil that nurtures the fear of conceivablethreats. Virtual risks no longer need to exist in order to be perceived asfact. You might criticize them as phantom risks, but this does not mattereconomically. Perceived as risks, they cause enormous losses and disasters.Thus, the distinction between “real” risks and “hysterical” perception nolonger holds. Or more precisely:Economically,it makes no difference.

(4) The dominance of public perception.Risk acceptability depends on

whether those who carry the losses also receive the benefits. Where this is





not the case, the risk will be unacceptable to those affected. If even thebenefit is in dispute—as is the case with GM foods—it is not enough to

demonstrate that the “residual risk” is, statistically speaking, very small.A risk is always framed by the criteria used in evaluating it, and colored by the cultural assumptions that surround it. One might say: Risks are as bigas they appear. From a social-constructionist perspective, this is obvious.Yet it becomes a universally relevant social fact in the case of manufactureduncertainties.

It is against this background that technical experts perceive the lay population as irrational or hysterical, either because people seem to bemaking bad calculations of personal risk—e.g., when smokers protestagainst nuclear energy—or because they express themselves with luridimages—e.g., when many people in Great Britain, seemingly invaded by German angst, demonize their genetically modified (GM) wonders as“Frankenstein food.” In the public domain, statements of risk are based oncultural standards, technically expressed, about what isstilland what isno longer acceptable. When scientists say that an event has a low probability of occurring, and hence is a negligible risk, they also express a judgmentabout relative payoffs. Social and cultural judgments do not simply distortthe perception of risk.Without social and cultural judgments, thereare norisks. Those judgmentsconstitute risk, although often in hidden ways.

It is almost trivial to state that risk is more than ever a social construc-tion (see Adams, 1995; Krimsky & Golding, 1992; Short & Clarke, 1992).Yet such a statement has important consequences for our analysis. Itmeans that we have to focus our attention on the power relations of risk definition. Once we define risk conflict in these terms, each conflict revealsa microstructure of subsidiary struggles over the same set of questions thatrepeatedly recur: Who has the burden of proof? What constitutes proof under conditions of uncertainty? What norms of accountability are used?Who is responsible morally? And who is responsible for paying the costs?And this is true both nationally and transnationally, including along theNorth-South divide. When the politics of risk are explicated along theselines, they cast a rare light on shifts in epistemology and their relation topolitical strategy. Changing power relations of definition are closely con-nected to changes in some of society’s central self-definitions. And to theextent that power in risk conflicts has changed to favor social move-ments, it shifts the whole context of risk conflict into a more reflexiveconstellation.

The key to a positive response to the culture of uncertainty lies in thereadiness to make risk a topic of public debate; the willingness to negotiatebetween different rationalities, rather than to engage in mutual denuncia-tion; and a recognition of the central importance of acting responsibly andaccountably with regard to the losses that will always occur despite every precaution. A culture of uncertainty shuns the notion of “residual risks”because risks are only residual if they happen to other people. But the cul-

ture of uncertainty is also different from a “safety culture”; that is, a culture





in which absolute safety is considered an entitlement that society shouldstrive toward. Such a culture would smother all innovation in its cradle.

In some ways, this argument elaborates a central idea of John Dewey inhis 1927 book,The Public and Its Problems.6 Dewey saw local communitiesbeing overrun by corporations that operated on a national scale, much aswe now see national communities being overrun by corporations operat-ing on a world scale. For him, the only way for communities to regain theirfunction of integrating individuals into society was to somehow match thescope of corporations and of the consequences of their actions. Dewey makes an important contribution to the theory of global risks by observ-ing that a public is something that stands between causes and their con-sequences, and gives them a symbolic meaning they would not haveotherwise. That meaning is what makes politics and society possible. Andtherefore it is not actions butconsequences that are at the core of politics.And it is by giving consequences meaning that the public plays its key rolein the formation of society:

The doctrine of economic interpretation as usually stated ignoresthe transformation which meanings may effect; it passes over the new medium which communication may interpose between industry andits eventual consequences. It is obsessed by the illusion which vitiatedthe “natural economy”: an illusion due to failure to note the differencemade in action by perception and publication of its consequences,actual and possible. It thinks in terms of antecedents, not of the even-tual; of origins, not fruits. (Dewey, 1954, p. 156)

Although Dewey was certainly not thinking of global warming, GM food,and BSE, his theory is perfectly applicable to the situation of risk society. Inhis view,public discourse grows not out of consensus over decisions but outof dissent over theconsequences of decisions. Modern risk crises are consti-tuted by just such controversies over consequences. Where some may see anoverreaction to risk, Dewey thus sees a reason for hope. He thinks that suchconflicts serve anenlightenment function. They bridge the gap betweenexperts and citizens. And this is what gives them the political explosivenessthat the technical diagnosis of the problem seeks to cover up.

The problem that Dewey started from—that local communities werebeing overwhelmed by the side effects of modernization—exists todayon a global scale. The border-spanning long-term consequences of indus-trialization have the capacity for igniting transnational “communities of risk” or “risk publics.” From the perspective of industry and governments,the fact that social movements can now reach beyond the boundaries of national legal systems in their attempt to hold corporations responsiblefor the long-term consequences of their actions seems like a recipe fordestabilization. From Dewey’s perspective, the same events look like a vitalstep toward the building of new institutions. Risk has the power to rip





down the facades of organized irresponsibility. One can see a premonitionof this power in the lightning flash of media publicity. It tears the decent

drapery for just a moment, and pushes groups into contact from across theworld that had hitherto been ignorant of each other’s existence. This com-munication of risks not only happens despite people’s original intentions,it goes particularly against the grain of experts and governments.

Social scientists have shown that many risks that are technically quitesmall loom larger than they “ought to” from the perspective of everyday life.But if we start from the hypothesis that people are acting rationally, wheredoes this difference come from? It comes from what we just discussed, frombeing exposed to risks against one’s will. An omnipresent mass mediaspreads an omnipresent knowledge of an omnipresent risk, say, contractingthe BSE virus through your food. Even though the risk may be very small,its presence completely changes the experience of eating. Even if the chanceof dying from a horrible brain-wasting disease is very small, it is not a lot-tery anyone wants to participate in. So they vote for another product,thereby making possible the collapse of whole markets. The propensityof consumers to act accordingly—to “vote with their shopping trolleys,” asit were—has increased and nowadays presents a formidable challenge tomany industries (Friedman, 1991; Micheletti, 2003; Micheletti et al., 2003).

The Legitimacy Gap in the Transnational Realm

The mobilization of an increasingly risk-sensitive public has severe conse-quences for governments and corporations. From the perspective of thepublic at large and the critical consumer, corporations are makingde facto political decisions while still attempting to shift responsibility for theirlong-term risks onto others. In other words, corporations engage in a formof subpolitics that shares many attributes with traditional formal politicsbut bypasses the established institutions (Beck, 1999a; Holzer & Sørensen,2003). The resultingincongruity between power and legitimacy generates alatent tension. It works fine so long as things are run smoothly. But ina crisis situation, the new emperors are often revealed to be naked of legit-imacy. The chronic yet regularly unnoticed legitimacy deficit makes it pos-sible for accidents to amplify quickly into crises and collapsed markets.

Conversely, this lack of legitimacy is also the main source of power forsocial movements. Social movements are neither organized democratically nor legitimated by democratic institutions. However, many people regardthem as credible representatives of the public interest. While profit-seekingenterprises are necessarily associated with self-interest, social movementorganizations can benefit from the legitimacy that modern culture bestowson actions seemingly motivated by altruistic motives (Boli et al., 2003).When one surveys young people as to which political actors they respect the





most, it is these movements that occupy the highest rank. Movementsand corporations thus occupy opposite positions in the power-legitimacy

matrix: Transnational corporations have many resources of power but littlelegitimacy, while social movements have few resources of power but a deepwell of legitimacy (Beck, 2002, Ch. 6; Holzer, 2006). On that basis, social-movement organizations and advocacy networks are likely to be followedwhen they seek to mobilize the public against corporations. The incongruity between power and legitimacy is the Achilles heel of the transnational firm,and it is the point at which the public strategies of social movements takeaim. In the end, even powerful companies can find themselves backed upagainst the wall by relatively tiny and poorly outfitted networks of activists.

The Brent Spar affair is a good illustration of how huge the legitimacy gaphas grown,and how, once uncovered and harnessed, it makes available a forceby means of which David can defeat Goliath (Grolin, 1998; Tsoukas, 1999;Wätzold, 1996). In this case, David was Greenpeace, a voluntary organizationwithout a formal public mandate; it has employees as well as ships, heli-copters, hot-air balloons, and quite a considerable budget. But it is definitely aDavid when ranged against a multinational oil company such as RoyalDutch/Shell. In the Brent Spar case,Shell also had the law on its side as well asthe police and the support of the elected British government. And, perhapsmost interestingly of all, it had environmental science on its side: Greenpeace’sinitial claims about toxic waste onboard the Brent Spar later turned out to bewrong.And yet in the end, with every conceivable advantage,Shell lost. Therecould be perhaps no better demonstration of what an enormous resource isnow available to be tapped by a skillfully organized public campaign.7

The Brent Spar controversy is a particularly instructive example of thechallenges that corporations face when they have to defend themselvesagainst the campaigns of social movement organizations. Both scholars andpractitioners regard it as a paradigmatic case study in the field of corporatecrisis management (see Paine, 1999; Paine & Moldoveanu, 1999). Althoughthe setting and trajectory of the conflict—as well as its public resonance—was exceptional, it must be seen in the context of a range of similar events—both before and after the Brent Spar case. Those range from the early anticorporate campaigns orchestrated by consumer advocates such asRalph Nader (see Vogel, 1978) over the long and ultimately successful activismagainst Nestlé’s infant-formula marketing in the Third World (Sethi &Post, 1979; Sikkink, 1986) to the antisweatshop campaigns against Nike andother global companies (Global Exchange, 2003; Micheletti & Stolle, 2005).

Although these and various other campaigns have a lot in common, thereare also important differences. For instance, some conflicts revolve aroundthe divergence of standards regarding working conditions or environmentalprotection. To the extent that the campaigns aim to harmonize those stan-dards across the world, one may expect fewer protest motives in the future.Other cases, however, cannot be as easily resolved by more encompassingregulation: They concern the foundations of regulation as such and are





thus directly related to the aforementioned culture of uncertainty.Confrontations about fundamental uncertainties such as the impact of toxic

waste on marine life or the introduction of GM organisms into the foodchain are not simply about regional variations in regulation and can there-fore not be addressed by a convergence of standards alone. They concern therelationship between decision-making power on the one hand and the rulesof accountability and responsibility on the other: In world risk society, theconsequences and side effects of risky decisions transcend the routines andboundaries of a predominantly territorial mode of regulation.

The resulting legitimation deficit, which grows out of the gap betweenincreasingly global and long-term risks and spatially and chronologically limited responsibility, is now a constant potential, waiting to be trans-formed at any moment into a radical loss of confidence in established insti-tutions. It has changed the balance of power between the risk-critical publicand the transnational corporations. Globalization thus does not simply mean that corporations grow more powerful. Rather, the accelerating paceof international economic integration serves to increase the legitimationdeficit of border-spanning economic decision-making. This chronic legiti-mation deficit renders consumer markets extremely fragile and makesinternational corporations extremely vulnerable (Willetts, 1998).The morethey manage to escape from the power of governments, the more they seemto depend on direct relationships with consumers, markets, and civilsociety. Globally operating actors such as transnational corporations areconfronted with the problem of diverse and often contradictory legalframeworks and societal expectations. They face new uncertainties as soci-etal demands appear increasingly contradictory and elusive. The globaliza-tion of communication systems has further exacerbated this problembecause activities in one locale are now scrutinized by a transnational pub-lic representing various value systems. For the implementation of decisionsthis may lead to problems, as Phil Watts of Shell International observed:

Communications technology has created a global goldfish bowl. All multi-national companies operate in front of a hugely diverse worldwide audi-ence. . . . [S]ince the ethical, social, cultural and economic priorities whichunderlie their demands are . . . often local and personal, those demandswill differ, will often conflict,and may be irreconcilable. (Watts,1998,p.24)

The crucial point for corporations is that the legality of their operationsmay be insufficient to ensure legitimacy. For instance, Shell’s planned BrentSpar disposal was entirely legal. The operation complied not only withBritish but also with international law. Initially, none of the affectedstates objected to it. What Shell did not and probably could not ensure, however,was the acceptance by the (transnational) public.The latter becomes prob-lematic when decisions and their consequences are regarded as transcend-ing the boundaries of the nation-state. Accordingly, the legitimacy and





acceptance of decisions that comply with legal rules cannot be taken forgranted anymore.

It is hardly surprising that organizations, in particular business enter-prises, should have sought to address that problem. The recent focus on“stakeholder relations” (Donaldson & Preston, 1995; Freeman, 1984; Weiss,1998) is instructive in this respect. More and more organizations seek toidentify those groups and issues that could throw their operations into tur-moil. The only way to regain legitimacy appears to be a systematic effort toengage the public.8 As the public has grown wary of the side effects of eco-nomic activities, the thoroughly private nature of business has been calledinto question. Echoing Dewey’s arguments, the distinction between publicand private is redrawn—this time not on the basis of property, but on thebasis of theconsequencesof decisions.9 Thus, one may argue that businessdecisions are increasingly becoming public in nature because of theiralleged impact on others. The ensuing scrutiny and distrust of businesspractice has transformed large corporations into “quasi-public institu-tions” (Mintzberg, 1983, p. 525; Ulrich, 1977). Taking stakeholders andpublic demands seriously could become a viable alternative to the expert-based safety culture of the past.Although such an approach cannot pretendto ensure the predictability of future events, it certainly represents a morerealistic answer to the challenges of a culture of uncertainty.

ConclusionIn the risk-sensitive social environment of world risk society, organiza-tions have to realize that “crises” do not always have a clearly identifiableorigin or cause. A general shift from calculable risk to uncertainty meansthat it is impossible to control or even accurately predict a firm’s externalenvironment. The shift from a safety culture based on the acceptance of residual risks to a culture of uncertainty has made the challenges faced by organizations more incalculable. Furthermore, the globalization of orga-nizational activities and public arenas has multiplied the observers andaudiences and has thus only exacerbated this problem. The lesson learnedby society—that calculable risk is a useful but not necessarily correct inter-pretational device—may still have to be learned by some organizations,too. The risks they regularly produce are reflected back by the fact thatpublic outrage can wreak havoc on a company’s reputation. The problemof manufactured uncertainties and their consequences thereby becomesrelevant to everyday decision-making processes. Organizations cannotstop making decisions, but they can be cognizant of the fact that otherswill increasingly judge them by their consequences and side effects—andnot by their good intentions.





Notes

1. This section draws on arguments developed in more detail in Beck (1992;1996b; 1999c).

2. Some theorists follow Knight (1921) and distinguish between risk anduncertainty. However, most modern observers would not subscribe to Knight’sobjectivist interpretation of risk. Even probabilistic risk always entails uncertain-ties that are simply obfuscated by mathematical precision. The difference Knighthad in mind seems to be whether fundamental uncertainties are acknowledged inthe decision-making process—or not.

3. By referring to a “culture of uncertainty” we take up a line of investigationpioneered by Mary Douglas and her collaborators (Douglas, 1992; Rayner, 1992;Schwarz & Thompson, 1990; Thompson et al., 1990). However, we perceive the

culture of uncertainty as a growing and increasingly encompassing pattern of latemodern culture that, as we shall argue below, is also becoming global in scope.4. See Luhmann (1990, 1991) for a detailed discussion of how this distinction

between risk and danger has become increasingly relevant for modern society.5. To be sure, the decision to go out in the first place may also be construed

as acceptance of the risk of getting wet. Yet since it is impossible to stay at homeforever, there is no real alternative, and therefore no opportunity for decision-making: no risk, but danger.

6. The following draws on a line of argument developed in Beck (2001).7. It is important to note that discursive skill and not just professional orga-

nization played a major role in Greenpeace’s success. Shell’s insistence on rational-scientific argument could not match Greenpeace’s discourse of possible risks andenvironmental responsibility (see Holzer, 2001).

8. “Organizations in modern societies are public not only in the sense thattheir structures, processes and ideologies are open to observation, but also in theirultimate dependence on public acceptance, i.e., of positioning themselves in rela-tion to the perceptions and policies of society at large” (Brunsson, 1989, p. 216).

9. See Dewey’s (1954, p. 15) dictum that “the line between private and publicis to be drawn on the basis of the extent and scope of the consequences of acts whichare so important as to need control, whether by inhibition or by promotion.”

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